Commentary: SEC gets black eye over Madoff scandal

The Bernard Madoff scandal is not only another blow to trust and confidence on Wall Street, but another knock on the reputation of the Securities and Exchange Commission — supposedly the cop on the financial-markets beat.

Earlier this year, SEC Chairman Christopher Cox famously said Bear Stearns was in reasonably good shape three days before the firm went belly-up.

Now Cox has blasted his career regulators for failing to unearth the alleged $50 billion Ponzi scheme that Madoff is accused of running with his investment firm, Bernard L. Madoff Investment Securities LLC.

Remarkably, the Madoff operation had been subjected to several SEC inquiries over the years, most recently in 2007.

But Cox, in a blistering rebuke of his own staffers, says they never sought a formal commission-endorsed investigation, which — given the SEC's power of subpoena — would have forced Madoff to produce critical information about his operation.